Publishers ask Ottawa for $350M fund to rescue print journalism

‘A lot of players out there are getting subsidies’

TORONTO • Newspaper publishers, crippled by the digital content revolution that is destroying their business model, have banded together to ask Ottawa to create a $350 million fund to aid the print and online media industry.

The Canadian Journalism Fund would reimburse newspaper and web-based journalism providers 35 per cent of a journalist’s salary, capped at $85,000, “in line with five-year union rates,” says the proposal from News Media Canada, created last fall through a merger of the Canadian Newspaper Association and the Canadian Community Newspapers Association.

The publishers say they are only asking for the kind of support that governments already funnel to other media: the Trudeau government increased the CBC’s budget by $135 million per year; the Canadian Media Fund contributed $371 million to television and digital projects in 2015-16; the CRTC will introduce $90 million in new supports for local TV in September; and the Canadian Periodical Fund currently funnels $75 million a year to magazine publishers.

“Put it all together and you’ve got a pretty uneven playing field,” said Bob Cox, publisher of the Winnipeg Free Press and chair of News Media Canada.

The Canadian Journalism Fund would fold in the $75 million from the Canadian Periodicals Fund, and would finance both newspaper and magazine journalism. “It adds up to $350 million. That’s the figure we have thrown out there.”

MPs on the House of Commons heritage committee announced support for the fund in a report, released Thursday in Ottawa. The Trudeau government will now have to decide whether to act.

Paul Godfrey, CEO of Postmedia Network Inc., praised the committee for recognizing that the newspaper industry is in crisis.

“I take my hat off to the Liberal government,” he said. “They were smart enough to notice that if they did nothing there will be no media in Canada.”

Godfrey noted that Postmedia is hemorrhaging ad revenue, which has declined about 20 per cent per year.

When he took over Postmedia in 2009, Godfrey said it had 5,400 employees. “We reduced them out of necessity to 2,500,” he said. Then Postmedia merged with the Sun Media chain, which also had 2,500 employees.

Now the combined company has 3,200 employees, he said. That’s a combined decrease of almost 5,000 newspaper employees over seven years.

“You think we like cutting people because we just don’t need them?” Godfrey said.

Postmedia is Canada’s largest newspaper publisher, with titles such as the Montreal Gazette, the Vancouver Sun and the National Post. Postmedia’s competitors, such as Torstar and the Globe and Mail, all support the creation of the fund.

The fund would include a “Canadian Civic News” component, which would fund reporters who write about legislatures, the courts, city halls, school boards and health boards. Journalists could also receive funding for “non-civic” news such as entertainment and sports. The funds would support reporting, editing, design, layout, photography, videography and infographics.

Cox and Godfrey said they do not fear the fund would create a lap-dog news media that curries favour with government to keep the public funds flowing.

“If you believe that newspapers provide a watchdog, and provide entertainment and education to Canadians, and the government wants it at arm’s length, then there is nothing to fear,” Godfrey said.

Cox said the fund “makes us all feel uneasy. A lot of us not that long ago would have opposed this. I would rather have a news media that was not subsidized.” But, he said, “a lot of players out there are getting subsidies.”

The newspaper publishers said Ottawa could fund news media from general tax revenues or by taxing U.S. tech giants that sell online ads targeting Canadians.

A recent report by the Public Policy Forum, commissioned by the federal government, estimated that Ottawa could raise $400-million a year by taxing the Canadian ad revenue of Google and Facebook.